When a market clearing price is determined
A) the exchange between buyers and sellers is voluntary.
B) the exchange between buyers and sellers is directed by outside factors such as the government.
C) the exchange between buyers and sellers benefits only the buyers.
D) the exchange between buyers and sellers benefits only the sellers.

Question

Quizplus · Accepted Answer

When a market clearing price is determined, it means that the quantity demanded by buyers equals the quantity supplied by sellers, and the market is considered to have cleared. The exchange between buyers and sellers at this price is voluntary, meaning that both parties have agreed to the terms of the transaction without any outside factors forcing them to do so. Therefore, choice A is the correct answer. Choices B, C, and D are incorrect because they suggest that the exchange is directed or benefits only one party, which is not the case in a market clearing price.

When a Market Clearing Price Is Determined